IRR Calculator
Project Cash Flows
Calculation Results
| Internal Rate of Return (IRR) | — |
|---|---|
| Net Present Value (NPV) | — |
What is Internal Rate of Return (IRR)?
The **Internal Rate of Return (IRR)** is a financial metric used to estimate the profitability of potential investments. It is the discount rate that makes the **Net Present Value (NPV)** of all cash flows from a project equal to zero.
The NPV and IRR Equations
The **Net Present Value (NPV)** is calculated as:
NPV = Sum( CF_t / (1 + r)^t )
Where CF_t is the cash flow at time t, and r is the discount rate.
The **IRR** is the value of r that solves the equation:
NPV = 0
Disclaimer. This calculator is for informational purposes only. IRR assumes cash inflows are reinvested at the same IRR rate, which may not match reality. Projects can also have multiple IRRs if cash flows change signs multiple times.